rom each paycheck, the federal government takes (withholds) money from your paycheck called “Federal Withholding.” Many times, people file their income taxes to get money back from the government because they overpaid their taxes over the year or they receive tax credits.
What things are held from your paycheck?
|Payroll Taxes||FICA||State Unemployment Insurance|
This federal tax is used to pay for the nation’s expenses such as the military, national parks, highways, schools and the national debt. Each of us has unique household income and the amount withheld from your paycheck will be different from other taxpayers. It can depend on how much you get paid and how you filled out your W-4 form.
Federal Insurance Contributions Act, or FICA, is taken out of all paychecks now to draw on later when we’re older and aren’t working. Both employers and employees contribute 6.2% of our salaries to Social Security and 1.45% to Medicare. The percentages for self-employed workers are higher.
State Unemployment Insurance
Some states require that employees contribute to a fund to help pay for the costs of unemployment benefits. Not all states do, so take a look at your paystub or talk to your Human Resources representative to see if this money is withheld from your paycheck.